IFC Supports Women Entrepreneurs in South Africa

Nov. 17, 2004, Washington, D.C.—Women-owned
small and medium enterprises (SMEs) in South Africa will gain access to
a comprehensive package of business-enhancing services under a new initiative
the International Finance Corporation announced today.
IFC, the private sector financing arm of the World Bank Group, is providing
$150,000 in grant funding to scale up the Women Entrepreneurship Program
it initiated in South Africa in 2002. The program gives women entrepreneurs
the tools and guidance they need to build their businesses, thus creating
jobs and developing sustainable new income for both the entrepreneurs themselves
and the workers they employ.
University of Pretoria research has found that women-owned businesses in
South Africa are generally less competitive than those run by men, and
that women entrepreneurs are also typically less equipped to present a
convincing business proposal to prospective financiers. This discrepancy
is mainly attributable to the multiple roles women are expected to fulfill
in South African society, which limits their access to essential business
services and industry information.
In response, the Women Entrepreneurship Program targets promising women-owned
SMEs that to date have had little access to loans from the county’s mainstream
banks. Those meeting its entry criteria participate on a cost-share basis,
receiving high-quality training, mentoring, marketing advice, and assistance
in preparing their own business plans that are then submitted to local
banks.
The program is managed by IFC’s regional SME development program, the
Africa Project Development Facility (APDF), and has trained 45 women in
its initial pilot phase. Additional support comes from partners such as
the country’s leading SME lender, Amalgamated Bank of South Africa (ABSA);
the training arm of the University of Pretoria; the South African Department
of Trade and Industry’s Gender Unit; local management consulting firm
ECI Africa; and others.
The new phase is being supported by IFC’s Technical Assistance Trust Fund
and will be rolled out nationwide over the next year. It builds on the
program’s initial successes with businesswomen such as Hlengiwe Hlophe.
She joined the program to increase the number of loans issued by her low-income
housing finance business, Peulwana Financial Services. APDF aided her in
producing marketing material and assisted with credit guarantees for the
company, helping it grow by 30 percent.
The program also assisted Tau Li Mesana Consultancy, a cleaning company
owned by two black women entrepreneurs. Its managing member, Nthati Khama,
recently announced that the firm had been awarded a R3.5 million (approximately
$578,000) contract by Metro Rail, based on the tender document submitted
using the business plan formulated during the WEP training program. The
contract has enabled Tau Li Mesana Consultancy to employ 12 additional
staff members.
“Women are an often overlooked segment of the South African economy, and
one that holds unrealized potential for growth,” says Richard Ranken,
Director of IFC’s Africa Department. “We believe they have the potential
to be a powerhouse. Matching high-potential women-owned firms with WEP’s
program of services will help this happen.”
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people’s lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.